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Nomura Calls For 100 Basis Point Fed Hike Next Week
During a year that'll be remembered by markets and enshrined in textbooks for the most aggressive Fe
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Terminal at 4.5-4.75%. This is hilarious. Don’t forget to buy this dip 🙂
Remember, St Volcker pushed rates to 17.6% in 1981, with an accompanying prime rate of 20%. I was there. Not hilarious.
nor would a deflationary spiral caused by over tightening, accompanied by crushing job losses and deep recession…
Our friend Kamil up there has previously expressed what certainly came across as an affinity for crypto. Right before a lot of it turned to dust this year. Given that, it’s little wonder he / she is hoping against hope that terminal isn’t somewhere up near 5%.
Also, as much as I wanted to believe the transitory narrative — and as much as I didn’t want the US economy to get stuck with broad-based inflation — it wasn’t transitory. And inflation is broad-based.
So, they gotta keep hiking. It’s either that, or admit that monetary policy is ineffective in certain inflation regimes and therefore they’re unable to meet their mandate. Since the latter option (i.e., an admission that it won’t always be possible to satisfy the inflation side of the mandate) is out of the question, it’s the former.
Look at this chart and tell me with a straight face that substantially higher rates are coming: https://www.longtermtrends.net/home-price-median-annual-income-ratio/
I’m good on “longtermtrends.net.” Thanks anyway, though!
And best of luck with that — what was it? — 5% or 6% you were so pleased about on your staked crypto. You’ll be able to get that risk-free in Bills pretty soon.
Predictions are a mug’s game but what the hay: 15,000 on BTC-USD by mid-October.
And unemployment above 10%.
This could get ugly fast for equities, even compared to the drops we have seen so far.
Sentiment is already rock bottom according to BofA’s survey and many stocks are in over 50% drawdowns. I don’t think it can get uglier for some these stocks. In my opinion, the risk lies with some of the big cap tech stocks, which are still overvalued in my opinion. It’s fools’ game to predict markets with any accuracy. All we can say with some degree of certainty is that higher rates will keep a lid on equity returns. Another leg down has also become almost a consensus view, so maybe this is the trough. That all said, something tells me, we haven’t really seen a market capitulation. Thank you, Mr H for keeping us informed.